Anti-Theft Effort May Boost iPhone Resales

A joint effort by the government and major wireless carriers to clamp down on stolen handsets, will likely raise the resale value of used smart phones, experts say.

The deal between U.S. officials and wireless providers calls for a central database of stolen cell phones, which is intended to thwart the growing market for hot handsets, the Wall Street Journal reports. Under the plan, it will be virtually impossible for phones reported stolen to be used. “It’s a good first step,” says Scott Sutherland, analyst for Wedbush Securities. He says a similar database cut the sale of stolen phones in Australia by 20% to 25%.

While the database will be problematic for thieves, experts say current phone users will be big beneficiaries. Consumers who want to offset the price of an upgrade by selling their old models will likely do better than ever. “The stolen phone database will have a positive impact on resale value since, at the very least, it will instill more confidence in buyers of used phones,” says Jeff Trachsel, chief marketing officer at re-sale site NextWorth.com. He says the database will be most beneficial for the most sought-after smart phones that are popular among thieves such as Apple’s iPhone and Samsung’s Galaxy S II.

The strong resale market already allows many smartphone users to upgrade to the newest models for free. That’s because carriers subsidizing the initial cost of new phones purchased with a contract. For instance, carriers sell an iPhone for $199 with a two-year contract, but the true value of the device is likely three times the price. As such, a smart phone only needs to hold about one-third of its original value over a two-year contract term for the owner to be able to upgrade for free, Trachsel says. “We are able to offer $200-plus for the previous iPhone model when the new model launches,” he says.

For those who do want to sell their old phone, studies show there’s a better re-sale market for iPhones than the more diverse Android market. “The iPhone is wiping the floor with Android and BlackBerry in terms of resale value,” according to a recent study by Priceonomics, a price comparison site. It found that iPhones are often sold for around 53% of their original manufacturer suggested retail price, while Androids are typically sold for only 42% of their original price, and BlackBerries for 41%. And just six months after purchase, iPhones still get nearly 90% of their original price, according to Priceonomics, while Androids only recoup around 66% of their original value.

Copyright 2019 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of
this material are governed by our
Subscriber Agreement
and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones
Reprints at 1-800-843-0008 or visit